As global fossil reserves are abruptly diminishing, there is a great need for bioenergy. Renewable and sustainable bioenergy products such as biofuels could fulfill the global energy demand, while minimizing global warming. Next-generation biofuels produced by engineered microorganisms are economical and do not rely on edible resources. The ideal biofuels are alcohols and n-alkanes, as they mimic the molecules in fossil fuels and possess high energy densities. Alcohols and n-alkane hydrocarbons (C-2 to C-18) have been produced using engineered microorganisms. However, it is difficult to optimize the complex metabolic networks in engineered microorganisms to obtain these valuable bio-hydrocarbons in high yields. Metabolic engineering results in drastic and adverse cellular changes that minimize production yield in microbes. Here, we provide an overview of the progress in next-generation biofuel (alcohols and n-alkanes) production in various engineered microorganisms and discuss the latest tools for strain development that improve biofuel production.